Attached files
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| 8-K - FORM 8-K - PALMETTO BANCSHARES INC | plmt20150126_8k.htm |
Exhibit 99.1
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FOR IMMEDIATE RELEASE |
For More Information Contact: |
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January 28, 2015 |
Roy D. Jones, Chief Financial Officer |
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(864) 240-5104 or rjones@palmettobank.com |
The Palmetto Bank Reports Fourth Quarter Net Income of $3.3 Million
Net Income of $9.4 Million for the Year Ended December 31, 2014
Greenville, S.C. – ☐Palmetto Bancshares, Inc. (NASDAQ: PLMT) (the “Company”) reported fourth quarter 2014 net income of $3.3 million ($0.26 per diluted common share) compared to $2.0 million ($0.15 per diluted common share) for the third quarter 2014. For the year ended December 31, 2014, the Company reported net income of $9.4 million ($0.73 per diluted common share) compared to net income of $27.7 million ($2.17 per diluted common share) for the year ended December 31, 2013. Results for 2013 include a non-cash income tax benefit resulting from the reversal of substantially all of the valuation allowance on the Company’s net deferred tax asset. Income before provision (benefit) for income taxes was $14.8 million for the year ended December 31, 2014 compared to $9.3 million for the year ended December 31, 2013. The Company also declared a quarterly cash dividend of $0.08 per common share payable on February 16, 2015 to shareholders of record on February 2, 2015.
“Our financial results for the fourth quarter reflect a strong finish as we ended the year with two consecutive quarters of loan growth,” said Samuel L. Erwin, Chairman and Chief Executive Officer. “We are pleased with the increase in our loan production during the second half of the year and the strength of our loan pipeline as we begin 2015. Our objective was to start 2015 with a higher level of earning assets to ensure we earn a full year of higher income in 2015.”
Highlights for the fourth quarter 2014 are summarized as follows:
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● |
Net income was $3.3 million, an increase of $1.3 million from the third quarter. The increase was driven primarily by the increase in the negative provision for loan losses from $500 thousand in the third quarter to $1.8 million in the fourth quarter, and a decline of $1.0 million in noninterest expense quarter over quarter. |
|
● |
Net interest income declined $85 thousand from the third quarter. Net interest margin declined 7 basis points from the third quarter to 3.70% as increases in average loans of $18.9 million and higher loan fees were more than offset by lower investment securities yields and the reversal of accrued interest on nonaccrual loans. Excluding the reversal of accrued interest, the net interest margin would have declined 1 basis point to 3.76%. |
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● |
The provision for loan losses was negative $1.8 million compared to negative $500 thousand in the third quarter. The negative provision in both quarters reflects continued improvement in the risk profile of the loan portfolio and low charge-offs. The allowance for loan losses coverage ratio declined to 1.60%, also reflecting continued positive trends in credit quality. |
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● |
Noninterest income decreased $134 thousand primarily due to a decline in nonsufficient funds (NSF) fees and lower Trust and Brokerage income. |
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● |
Non-credit related expenses decreased $456 thousand from the third quarter primarily due to lower incentive plan accruals, reduced headcount and lower FDIC deposit insurance assessments. In addition, the third quarter included nonrecurring writedowns of $253 thousand on vacant bank properties being marketed for sale. |
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● |
Credit-related expenses, which are defined as foreclosed real estate writedowns and expenses and loan workout expenses, declined $540 thousand from the third quarter. Results for the fourth quarter included gains of $290 thousand on the individual sale of five lots in a single real estate development, while the third quarter included writedowns of $337 thousand on the bulk sale of all of the Company’s 16 lots in one particular community in this development. |
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● |
Total period-end loans held for investment increased $28.1 million (3.6%) from the third quarter and are up $37.5 million (4.9%) since December 31, 2013. The increase during the quarter reflects an increase in commercial and consumer organic loan originations, a continuation of our strategy to retain a larger portion of mortgage and Small Business Administration (SBA) loan production in the held for investment loan portfolio, a $5.0 million purchased commercial loan participation, and the purchase of $22.1 million of indirect auto loans to supplement organic loan originations. |
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● |
Nonperforming assets decreased $2.8 million from the third quarter reflecting ongoing payments and dispositions of problem loans and foreclosed assets. |
The discussion of the Company’s results of operations and financial condition below is supplemented by the accompanying financial tables.
Net Interest Income
Net interest income declined $85 thousand and the net interest margin decreased 7 basis points to 3.70% in the fourth quarter 2014. The declines are primarily due to lower yields on investment securities and the reversal of accrued interest on nonaccrual loans. During the fourth quarter 2014, net interest income and net interest margin benefited from an increase in average loans of $18.9 million and higher loan fees. Absent the reversal of accrued interest, net interest income would have increased $62 thousand while the net interest margin would have only declined 1 basis point.
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● |
The overall yield on the loan portfolio continued to decline as higher-yielding loans matured and were replaced with new loan originations and purchases at lower rates in the current low interest rate and competitive banking environment. |
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The overall cost of funds was unchanged and remained at 0.05% during the fourth quarter 2014, reflecting the Company’s strong core deposit franchise. Core deposits, defined as total deposits less time deposits over $100 thousand, represent 93% of total deposits at December 31, 2014. |
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The Federal Reserve continues to maintain short term interest rates near historically low levels. The sustained level of low interest rates, in addition to increasing competition for credit-worthy borrowers in the Company’s markets, has an overall negative impact on earning asset yields and makes improvement in our net interest income and margin challenging. |
Noninterest Income
Noninterest income decreased $134 thousand from the third quarter, primarily due to the following:
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NSF income declined $86 thousand as a result of a seasonal decline in transaction volumes. |
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Fees for trust and investment management and brokerage services declined $39 thousand due to a change in the mix and lower amount of assets under management. |
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The Company implemented revenue enhancement initiatives, including the introduction of new and enhanced products, in the third quarter 2014 which continued to positively impact noninterest income during the fourth quarter 2014 primarily through higher service charges on deposits accounts and debit card and automatic teller machine income. These initiatives are expected to result in additional incremental revenues in 2015. |
Noninterest Expense
Total noninterest expense decreased $1.0 million during the fourth quarter 2014, primarily due to the following:
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Salaries and personnel expense declined $409 thousand due to lower incentive plan accruals and headcount during the quarter. |
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FDIC deposit insurance assessments declined $272 thousand as a result of improvement in the risk tier of the Company’s banking subsidiary. |
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Foreclosed real estate writedowns and expenses and loan workout expenses declined $540 thousand from the third quarter 2014. Results for the fourth quarter 2014 included gains of $290 thousand on the individual sale of five lots in a single real estate development while the third quarter 2014 included writedowns of $337 thousand on the bulk sale of all of the Company’s 16 lots in one particular community in this development. |
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During the third quarter 2014, the Company recorded a non-recurring writedown of $253 thousand to reflect a reduction in the estimated fair values of vacant land and a branch facility that are being marketed for sale. |
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During the fourth quarter 2014, the Company continued its focus on strategic efficiency to address net interest margin challenges, revenue pressures on fee income and increased regulatory compliance costs. Fourth quarter results included the benefits of various process improvement projects implemented during 2014 such as transition to part-time staffing in the branches, direct recruiting in lieu of paying staffing agencies, consolidation of telephone providers and renegotiation of equipment maintenance contracts. The process improvement projects are expected to result in additional incremental reductions in noninterest expenses in 2015. |
Credit Quality
Nonperforming assets decreased $2.8 million from the third quarter 2014 to $18.4 million at December 31, 2014 as a result of continued problem asset resolutions.
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Net charge-offs were $646 thousand (0.33% of average loans, annualized) during the fourth quarter 2014 compared to net recoveries of $270 thousand during the third quarter 2014. Net recoveries in the third quarter 2014 included an $833 thousand recovery on one borrower relationship previously charged-off. Excluding the impact of this recovery, net charge-offs in the third quarter 2014 were $563 thousand (0.30% of average loans, annualized). |
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Past due loans were 0.51% of loans outstanding at December 31, 2014 compared to 0.47% of loans outstanding at September 30, 2014 and have remained below 1.00% for eight consecutive quarters. |
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The allowance for loan losses was reduced in both the third and fourth quarters 2014 given the continued overall improvement in credit quality and reduced risk profile of the loan portfolio. The allowance for loan losses coverage ratio was 1.60% at December 31, 2014 compared to 1.98% at September 30, 2014. Absent unexpected negative trends in credit quality, the Company expects its allowance for loan losses coverage ratio to be further reduced in 2015. |
Balance Sheet and Capital
Total assets increased $21.6 million from September 30, 2014 to $1.1 billion at December 31, 2014 primarily due to organic and purchased loan growth.
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During the fourth quarter 2014, gross loans increased $28.1 million reflecting organic growth in commercial and consumer loans, a strategic decision to retain a larger portion of mortgage and SBA loan production in the loan portfolio, a $5.0 million purchased commercial loan participation, and the purchase of $22.1 million of indirect auto loans from another financial institution. The retention of mortgage and SBA loan production and the loan purchases were a continuation of the Company’s strategy begun in third quarter 2014 to supplement organic loan growth to start 2015 with a higher level of earning assets. In January 2015, the Company also purchased a $12.3 million portfolio of residential mortgage loans. To the extent organic loan growth slows or unscheduled payoffs exceed organic loan growth, the Company may consider additional loan pool purchases in the future. |
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Loan origination volume increased during the fourth quarter 2014, including construction and development loans for which funding is expected in 2015. While the overall economic environment remains challenging and the level of competition for lending relationships is high, the Company finished 2014 with a strong loan pipeline and anticipates continued loan growth in the first quarter 2015. |
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Investment securities available for sale decreased $3.1 million during the fourth quarter 2014 to $211.5 million as principal paydowns and maturities were redeployed into higher-yielding loans. At December 31, 2014, an after-tax net unrealized loss on the investment securities portfolio of $820 thousand was recorded in accumulated other comprehensive loss, compared to $1.5 million at September 30, 2014. At December 31, 2014, the estimated percentage decrease in fair value resulting from an instantaneous 100 basis point increase in interest rates was 3.95%. |
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Non-maturity deposits decreased $3.5 million while time deposits decreased $4.5 million. The reduction in non-maturity deposits is primarily related to an elevated level of funds in a client account on September 30, 2014 that were temporarily held at the Company pending investment during the fourth quarter 2014. Core deposits as a percentage of total deposits remained at 93% and continue to support the Company’s low-cost deposit franchise. |
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The Company remains focused on executing specific strategies to grow core deposits through increasing balances in existing accounts as well as through growth in the number of new households. These strategies include proactively retaining clients, attracting new clients including in markets with local bank disruption, utilizing teammates with specialized deposit product knowledge, providing rewards programs for referrals and use of debit cards, and enhancing existing deposit products. Growth in deposits is expected to be used primarily to fund future loan growth. |
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To fund loan growth during the fourth quarter 2014, at December 31, 2014 the Company had $35 million of borrowings from the Federal Home Loan Bank of Atlanta (“FHLB”) that matured in January 2015. These borrowings were rolled into new borrowings from the FHLB that mature later in 2015. |
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The Company’s banking subsidiary, The Palmetto Bank, met all regulatory required minimum capital ratios and continued to be categorized as “well-capitalized” at December 31, 2014. |
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In January 2015, the Company declared a quarterly cash dividend of $0.08 per common share payable on February 16, 2015 to shareholders of record on February 2, 2015. |
“We are pleased to report higher quarterly earnings in the fourth quarter, and the resulting increase in the amount of our quarterly dividend to shareholders,” continued Erwin. “In 2015, we are continuing our strategy to generate growth in quality earning assets, increase deposits through growth in households, and realize the ongoing benefits from our revenue enhancement and expense reduction initiatives implemented during 2014. We expect the combination of these strategies to result in continued improvement in our earnings over the course of 2015.”
About The Palmetto Bank: Headquartered in Greenville, South Carolina, The Palmetto Bank is a 108-year old community bank and is the second largest banking institution headquartered in South Carolina. The Palmetto Bank has assets of $1.1 billion and serves the Upstate of South Carolina through 25 branch locations in nine counties along the economically attractive I-85 corridor, as well as 24/7/365 service through online and mobile banking, ATMs and telephone. The Bank has a unique understanding of the Upstate market and delivers local decision making with greater responsiveness. Through its Retail, Commercial and Wealth Management lines of business, the Bank specializes in providing financial solutions to consumers and small to mid-size businesses with deposit and cash management products, loans (including consumer, mortgage, credit card, automobile, Small Business Administration, commercial, and corporate), lines of credit, trust, brokerage, private banking, financial planning and insurance. The Bank provides solutions that improve the client experience by providing clients the ability to bank whenever they want, wherever they want. Additional information may be found at the Bank's website at palmettobank.com or on Facebook.
# # #
Addendum to News Release – Forward-Looking Statements
Certain statements in this News Release contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements relating to future plans and expectations, and are thus prospective. Such forward-looking statements are identified by words such as “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” and “projects,” as well as similar expressions. Forward-looking statements are subject to risks, uncertainties, and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Factors which could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements include, but are not limited to: (1) the strength of the United States economy in general and the strength of the local economies in which the Company conducts its operations which could result in, among other things, a deterioration in the credit quality or a reduced demand for credit, including the resultant effect on our loan portfolio and allowance for loan losses and the rate of delinquencies and amounts of charge-offs, or adverse changes in asset quality in our loan portfolio, which may result in increased credit risk-related losses and expenses; (2) adverse conditions in the stock market, the public debt market and other capital markets (including changes in interest rate conditions) and the impact of such conditions on the Company, and the timing and amount of future capital raising activities by the Company, if any; and (3) actions taken by banking regulatory agencies related to the banking industry in general and the Company or the Bank specifically. The assumptions underlying the forward-looking statements could prove to be inaccurate. Therefore, we can give no assurance that the results contemplated in the forward-looking statements will be realized. The inclusion of this forward-looking information should not be construed as a representation by our Company or any person that the future events, plans, or expectations contemplated by our Company will be achieved. Additional factors that could cause our results to differ materially from those described in the forward-looking statements can be found in our reports (such as Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K) filed with the U.S. Securities and Exchange Commission (the “SEC”) and available at the SEC’s Internet site (http://www.sec.gov), including the “Risk Factors” included therein. All subsequent written and oral forward-looking statements concerning the Company or any person acting on its behalf is expressly qualified in its entirety by the cautionary statements above. We do not undertake any obligation to update any forward-looking statement to reflect changes in circumstances or events that occur after the date the forward-looking statements are made.
Palmetto Bancshares, Inc. and Subsidiary
Consolidated Balance Sheets
(dollars in thousands, except per share data)
(unaudited)
|
December 31, |
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December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
2014 vs. 2013 |
|||||||||||||||||||
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2014 |
2014 |
2014 |
2014 |
2013 |
% Change |
|||||||||||||||||||
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Cash and cash equivalents |
$ | 36,887 | $ | 43,383 | $ | 60,104 | $ | 65,942 | $ | 38,178 | (3.4 |
)% | ||||||||||||
|
Investment securities available for sale, at fair value |
211,511 | 214,582 | 209,617 | 208,772 | 214,383 | (1.3 | ) | |||||||||||||||||
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Trading account assets, at fair value |
5,513 | 5,458 | 5,381 | 5,247 | 5,118 | 7.7 | ||||||||||||||||||
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Mortgage loans held for sale |
1,125 | 268 | 4,874 | 2,474 | 1,722 | (34.7 | ) | |||||||||||||||||
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Loans, gross |
805,059 | 776,947 | 753,049 | 755,878 | 767,513 | 4.9 | ||||||||||||||||||
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Less: allowance for loan losses |
(12,920 | ) | (15,366 | ) | (15,596 | ) | (16,243 | ) | (16,485 | ) | (21.6 | ) | ||||||||||||
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Loans, net |
792,139 | 761,581 | 737,453 | 739,635 | 751,028 | 5.5 | ||||||||||||||||||
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Premises and equipment, net |
22,006 | 22,233 | 22,630 | 22,980 | 23,367 | (5.8 | ) | |||||||||||||||||
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Foreclosed real estate |
5,949 | 6,595 | 7,335 | 7,490 | 7,502 | (20.7 | ) | |||||||||||||||||
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Deferred tax asset, net |
17,053 | 18,109 | 18,875 | 20,546 | 22,087 | (22.8 | ) | |||||||||||||||||
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Bank-owned life insurance |
11,923 | 11,845 | 11,767 | 11,691 | 11,617 | 2.6 | ||||||||||||||||||
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Other assets |
14,705 | 13,121 | 13,629 | 14,630 | 15,227 | (3.4 | ) | |||||||||||||||||
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Total assets |
$ | 1,118,811 | $ | 1,097,175 | $ | 1,091,665 | $ | 1,099,407 | $ | 1,090,229 | 2.6 |
% | ||||||||||||
|
Noninterest-bearing deposits |
$ | 196,219 | $ | 212,813 | $ | 199,169 | $ | 191,474 | $ | 178,075 | 10.2 |
% | ||||||||||||
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Interest-bearing deposits |
732,101 | 723,476 | 729,084 | 736,559 | 729,285 | 0.4 | ||||||||||||||||||
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Total deposits |
928,320 | 936,289 | 928,253 | 928,033 | 907,360 | 2.3 | ||||||||||||||||||
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Retail repurchase agreements |
15,921 | 24,050 | 17,867 | 17,319 | 18,175 | (12.4 | ) | |||||||||||||||||
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FHLB advances |
35,000 | - | 10,000 | 20,000 | 35,000 | - | ||||||||||||||||||
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Other liabilities |
6,526 | 5,501 | 5,291 | 7,103 | 5,877 | 11.0 | ||||||||||||||||||
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Total liabilities |
985,767 | 965,840 | 961,411 | 972,455 | 966,412 | 2.0 | ||||||||||||||||||
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Shareholders' equity |
133,044 | 131,335 | 130,254 | 126,952 | 123,817 | 7.5 | ||||||||||||||||||
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Total liabilities and shareholders' equity |
$ | 1,118,811 | $ | 1,097,175 | $ | 1,091,665 | $ | 1,099,407 | $ | 1,090,229 | 2.6 |
% | ||||||||||||
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Quarterly Average Balances |
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Loans(1) |
$ | 772,621 | $ | 753,711 | $ | 755,199 | $ | 764,526 | $ | 766,454 | 0.8 |
% | ||||||||||||
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Investment securities |
212,301 | 210,929 | 207,575 | 212,186 | 220,412 | (3.7 | ) | |||||||||||||||||
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Trading account assets |
5,474 | 5,410 | 5,314 | 5,178 | 5,067 | 8.0 | ||||||||||||||||||
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Total assets |
1,100,296 | 1,090,636 | 1,099,617 | 1,094,578 | 1,096,881 | 0.3 | ||||||||||||||||||
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Noninterest-bearing deposits |
208,073 | 205,257 | 200,933 | 186,852 | 188,603 | 10.3 | ||||||||||||||||||
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Interest-bearing deposits |
726,829 | 728,880 | 733,452 | 726,707 | 751,974 | (3.3 | ) | |||||||||||||||||
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Retail repurchase agreements |
25,330 | 18,177 | 18,383 | 18,269 | 22,638 | 11.9 | ||||||||||||||||||
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FHLB advances and other borrowings |
2,669 | 2,174 | 13,193 | 31,276 | 2,271 | 17.5 | ||||||||||||||||||
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Shareholders' equity |
132,823 | 131,094 | 128,612 | 125,664 | 123,299 | 7.7 | ||||||||||||||||||
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Other Data and Ratios |
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Past due loans |
0.51 |
% |
0.47 |
% |
0.38 |
% |
0.81 |
% |
0.42 |
% |
21.4 |
% | ||||||||||||
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Nonperforming loans |
$ | 12,463 | $ | 14,611 | $ | 15,269 | $ | 14,035 | $ | 15,108 | (17.5 | ) | ||||||||||||
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Nonperforming assets |
18,447 | 21,256 | 22,693 | 21,538 | 22,654 | (18.6 | ) | |||||||||||||||||
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90-days past due and still accruing interest |
238 | 243 | 731 | - | - |
n/m |
||||||||||||||||||
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ALL as % of loans held for investment |
1.60 |
% |
1.98 |
% |
2.07 |
% |
2.15 |
% |
2.15 |
% |
(25.6 | ) | ||||||||||||
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Net charge-offs (recoveries) (quarterly) |
$ | 646 | $ | (270 | ) | $ | 647 | $ | 242 | $ | 2,021 | (68.0 | ) | |||||||||||
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Net charge-offs to average loans (annualized) |
0.33 |
% |
n/m |
0.34 |
% |
0.13 |
% |
1.05 |
% |
(68.3 | ) | |||||||||||||
|
Outstanding common shares |
12,810,388 | 12,793,543 | 12,791,621 | 12,792,509 | 12,784,605 | 0.2 | ||||||||||||||||||
|
Book value per common share |
$ | 10.39 | $ | 10.27 | $ | 10.18 | $ | 9.92 | $ | 9.68 | 7.3 | |||||||||||||
|
Closing market price per common share |
16.70 | 14.14 | 14.39 | 14.09 | 12.96 | 28.9 | ||||||||||||||||||
|
Tier 1 risk-based capital (consolidated)(2) |
15.00 |
% |
15.41 |
% |
15.29 |
% |
14.82 |
% |
14.24 |
% |
5.3 | |||||||||||||
|
Total risk-based capital (consolidated)(2) |
16.26 | 16.67 | 16.54 | 16.08 | 15.49 | 5.0 | ||||||||||||||||||
|
Tier 1 leverage ratio (consolidated)(2) |
12.15 | 12.01 | 11.69 | 11.37 | 11.03 | 10.2 | ||||||||||||||||||
|
Full Time Equivalent Employees - including contractors |
288.3 | 290.5 | 299.8 | 308.0 | 305.0 | (5.5 | ) | |||||||||||||||||
(1) Includes Mortgage and Other loans held for sale.
(2) December 31, 2014 ratios are estimated and may be subject to change pending the filing of the Company's FR Y-9C with the Federal Reserve; all other periods are presented as filed.
Palmetto Bancshares, Inc. and Subsidiary
Composition of Loans Held for Investment
(dollars in thousands)
(unaudited)
|
December 31, |
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|
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
2014 vs. 2013 |
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2014 |
2014 |
2014 |
2014 |
2013 |
% Change |
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|
1-4 Family(1) |
$ | 204,439 | $ | 193,874 | $ | 177,179 | $ | 176,454 | $ | 178,125 | 14.8 |
% | ||||||||||||
|
Multifamily |
9,025 | 17,970 | 9,294 | 9,983 | 10,417 | (13.4 | ) | |||||||||||||||||
|
Owner-Occupied Commercial Real Estate (CRE) |
154,473 | 151,496 | 149,663 | 149,124 | 143,226 | 7.9 | ||||||||||||||||||
|
Non-Owner Occupied CRE |
218,464 | 228,037 | 210,788 | 211,673 | 225,251 | (3.0 | ) | |||||||||||||||||
|
Construction & Development - Land |
26,901 | 28,352 | 31,560 | 34,196 | 35,315 | (23.8 | ) | |||||||||||||||||
|
Construction & Development - Other |
21,162 | 20,393 | 39,865 | 40,177 | 41,243 | (48.7 | ) | |||||||||||||||||
|
Commercial and Industrial(2) |
80,927 | 73,563 | 72,260 | 72,477 | 73,078 | 10.7 | ||||||||||||||||||
|
Indirect Auto(3) |
66,277 | 42,251 | 40,502 | 40,089 | 38,724 | 71.2 | ||||||||||||||||||
|
Direct Consumer |
10,707 | 10,820 | 11,347 | 11,230 | 11,375 | (5.9 | ) | |||||||||||||||||
|
Other |
12,684 | 10,191 | 10,591 | 10,475 | 10,759 | 17.9 | ||||||||||||||||||
|
Total loans, gross |
$ | 805,059 | $ | 776,947 | $ | 753,049 | $ | 755,878 | $ | 767,513 | 4.9 |
% | ||||||||||||
(1) Reflects the purchase of a $14.0 million performing jumbo hybrid adjustable-rate mortgage loan pool during the three months ended September 30, 2014.
(2) Reflects the purchase of a $5.0 million loan participation during the three months ended December 31, 2014.
(3) Reflects the purchase of a $22.1 million performing indirect auto loan pool during the three months ended December 31, 2014.
Palmetto Bancshares, Inc. and Subsidiary
Consolidated Statements of Income
(dollars in thousands, except per share data)
(unaudited)
|
For the Three Months Ended |
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|
December 31, 2014 |
September 30, 2014 |
June 30, 2014 |
March 31, 2014 |
December 31, 2013 |
December 31, 2014 vs. 2013 % Change |
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|
Interest income |
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Interest earned on cash and cash equivalents |
$ | 22 | $ | 25 | $ | 32 | $ | 14 | $ | 17 | 29.4 |
% | ||||||||||||
|
Dividends received on FHLB stock |
11 | 15 | 25 | 14 | 10 | 10.0 | ||||||||||||||||||
|
Interest earned on trading account assets |
42 | 47 | 45 | 46 | 33 | 27.3 | ||||||||||||||||||
|
Interest earned on investment securities available for sale |
857 | 944 | 1,015 | 1,004 | 1,033 | (17.0 | ) | |||||||||||||||||
|
Interest and fees earned on loans |
8,851 | 8,840 | 8,803 | 8,998 | 9,330 | (5.1 | ) | |||||||||||||||||
|
Total interest income |
9,783 | 9,871 | 9,920 | 10,076 | 10,423 | (6.1 | ) | |||||||||||||||||
|
Interest expense |
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|
Interest expense on deposits |
120 | 124 | 123 | 127 | 385 | (68.8 | ) | |||||||||||||||||
|
Interest expense on retail repurchase agreements |
1 | - | 1 | - | 1 | - | ||||||||||||||||||
|
Interest expense on FHLB advances and other borrowings |
2 | 2 | 7 | 16 | 1 | 100.0 | ||||||||||||||||||
|
Total interest expense |
123 | 126 | 131 | 143 | 387 | (68.2 | ) | |||||||||||||||||
|
Net interest income |
9,660 | 9,745 | 9,789 | 9,933 | 10,036 | (3.7 | ) | |||||||||||||||||
|
Provision for loan losses |
(1,800 | ) | (500 | ) | - | - | 1,800 |
n/m |
||||||||||||||||
|
Net interest income after provision for loan losses |
11,460 | 10,245 | 9,789 | 9,933 | 8,236 | 39.1 | ||||||||||||||||||
|
Noninterest income |
||||||||||||||||||||||||
|
Service charges on deposit accounts, net |
1,843 | 1,929 | 1,693 | 1,562 | 1,883 | (2.1 | ) | |||||||||||||||||
|
Fees for trust and investment management and brokerage services |
140 | 179 | 177 | 146 | 151 | (7.3 | ) | |||||||||||||||||
|
Mortgage-banking |
257 | 275 | 516 | 461 | 498 | (48.4 | ) | |||||||||||||||||
|
Debit card and automatic teller machine, net |
630 | 603 | 618 | 586 | 652 | (3.4 | ) | |||||||||||||||||
|
Bankcard services |
75 | 76 | 70 | 67 | 67 | 11.9 | ||||||||||||||||||
|
Investment securities gains, net |
40 | - | - | 85 | 23 | 73.9 | ||||||||||||||||||
|
Trading account income, net |
57 | 98 | 175 | 171 | 134 | (57.5 | ) | |||||||||||||||||
|
Other |
232 | 248 | 241 | 288 | 167 | 38.9 | ||||||||||||||||||
|
Total noninterest income |
3,274 | 3,408 | 3,490 | 3,366 | 3,575 | (8.4 | ) | |||||||||||||||||
|
Noninterest expense |
||||||||||||||||||||||||
|
Salaries and other personnel |
4,414 | 4,823 | 4,723 | 4,790 | 4,837 | (8.7 | ) | |||||||||||||||||
|
Occupancy and equipment |
2,065 | 2,038 | 2,045 | 2,142 | 2,037 | 1.4 | ||||||||||||||||||
|
Professional services |
730 | 705 | 635 | 813 | 609 | 19.9 | ||||||||||||||||||
|
FDIC deposit insurance assessment |
79 | 351 | 356 | 356 | 356 | (77.8 | ) | |||||||||||||||||
|
Marketing |
291 | 290 | 222 | 255 | 304 | (4.3 | ) | |||||||||||||||||
|
Foreclosed real estate writedowns and expenses |
136 | 661 | 717 | 313 | 468 | (70.9 | ) | |||||||||||||||||
|
Loan workout expenses |
120 | 135 | 119 | 131 | 204 | (41.2 | ) | |||||||||||||||||
|
Other |
1,651 | 1,479 | 1,267 | 1,289 | 1,397 | 18.2 | ||||||||||||||||||
|
Total noninterest expense |
9,486 | 10,482 | 10,084 | 10,089 | 10,212 | (7.1 | ) | |||||||||||||||||
|
Income before provision (benefit) for income taxes |
5,248 | 3,171 | 3,195 | 3,210 | 1,599 | 228.2 | ||||||||||||||||||
|
Provision (benefit) for income taxes |
1,930 | 1,189 | 1,168 | 1,182 | (224 | ) |
n/m |
|||||||||||||||||
|
Net income |
$ | 3,318 | $ | 1,982 | $ | 2,027 | $ | 2,028 | $ | 1,823 | 82.0 |
% | ||||||||||||
|
Earnings per Share and Results of Operations |
||||||||||||||||||||||||
|
Basic net income per common share |
$ | 0.26 | $ | 0.15 | $ | 0.16 | $ | 0.16 | $ | 0.14 | 85.7 |
% | ||||||||||||
|
Diluted net income per common share |
0.26 | 0.15 | 0.16 | 0.16 | 0.14 | 85.7 | ||||||||||||||||||
|
Weighted average common shares, diluted |
12,814,738 | 12,771,634 | 12,744,931 | 12,707,444 | 12,689,245 | 1.0 | ||||||||||||||||||
|
Efficiency ratio |
73.3 |
% |
79.7 |
% |
75.9 |
% |
75.9 |
% |
75.0 |
% |
(2.2 | ) | ||||||||||||
|
Return on average assets |
1.20 | 0.72 | 0.74 | 0.75 | 0.66 | 81.4 | ||||||||||||||||||
|
Return on average equity |
9.91 | 6.00 | 6.32 | 6.54 | 5.87 | 69.0 | ||||||||||||||||||
|
Yields and Rates |
||||||||||||||||||||||||
|
Loans (1) |
4.54 |
% |
4.65 |
% |
4.68 |
% |
4.77 |
% |
4.83 |
% |
(6.0 |
)% | ||||||||||||
|
Investment securities available for sale |
1.61 | 1.79 | 1.96 | 1.89 | 1.87 | (13.9 | ) | |||||||||||||||||
|
Trading account assets |
3.04 | 3.45 | 3.40 | 3.60 | 2.58 | 17.8 | ||||||||||||||||||
|
Transaction deposits |
0.01 | 0.01 | 0.01 | 0.01 | 0.01 | - | ||||||||||||||||||
|
Money market deposits |
0.03 | 0.03 | 0.03 | 0.03 | 0.03 | - | ||||||||||||||||||
|
Savings deposits |
0.01 | 0.01 | * | 0.01 | 0.01 | - | ||||||||||||||||||
|
Time deposits |
0.22 | 0.22 | 0.23 | 0.22 | 0.64 | (65.6 | ) | |||||||||||||||||
|
Retail repurchase agreements |
0.02 | * | 0.02 | * | 0.02 | - | ||||||||||||||||||
|
FHLB advances and other borrowings |
0.30 | 0.36 | 0.21 | 0.21 | 0.17 | 76.5 | ||||||||||||||||||
|
Net interest margin |
3.70 | 3.77 | 3.81 | 3.94 | 3.86 | (4.1 | ) | |||||||||||||||||
(1) Includes Mortgage and Other loans held for sale.
* Rounds to less than .01% for the period.
Palmetto Bancshares, Inc. and Subsidiary
Consolidated Statements of Income
(dollars in thousands, except per share data)
(unaudited)
|
For the Years Ended December 31, |
2014 vs. 2013 |
|||||||||||
|
2014 |
2013 |
% Change |
||||||||||
|
Interest income |
||||||||||||
|
Interest earned on cash and cash equivalents |
$ | 93 | $ | 100 | (7.0 |
)% | ||||||
|
Dividends received on FHLB stock |
65 | 39 | 66.7 | |||||||||
|
Interest on trading account assets |
180 | 38 | 373.7 | |||||||||
|
Interest earned on investment securities available for sale |
3,820 | 4,017 | (4.9 | ) | ||||||||
|
Interest and fees earned on loans |
35,492 | 38,344 | (7.4 | ) | ||||||||
|
Total interest income |
39,650 | 42,538 | (6.8 | ) | ||||||||
|
Interest expense |
||||||||||||
|
Interest expense on deposits |
494 | 2,257 | (78.1 | ) | ||||||||
|
Interest expense on retail repurchase agreements |
2 | 2 | - | |||||||||
|
Interest expense on FHLB advances and other borrowings |
27 | 1 |
n/m |
|||||||||
|
Total interest expense |
523 | 2,260 | (76.9 | ) | ||||||||
|
Net interest income |
39,127 | 40,278 | (2.9 | ) | ||||||||
|
Provision for loan losses |
(2,300 | ) | 3,465 | (166.4 | ) | |||||||
|
Net interest income after provision for loan losses |
41,427 | 36,813 | 12.5 | |||||||||
|
Noninterest income |
||||||||||||
|
Service charges on deposit accounts, net |
7,027 | 6,902 | 1.8 | |||||||||
|
Fees for trust and investment management and brokerage services |
642 | 2,039 | (68.5 | ) | ||||||||
|
Mortgage-banking |
1,509 | 2,008 | (24.9 | ) | ||||||||
|
Debit card and automatic teller machine, net |
2,437 | 2,400 | 1.5 | |||||||||
|
Bankcard services |
288 | 261 | 10.3 | |||||||||
|
Investment securities gains, net |
125 | 310 | (59.7 | ) | ||||||||
|
Trading account income, net |
501 | 170 | 194.7 | |||||||||
|
Other |
1,009 | 746 | 35.3 | |||||||||
|
Total noninterest income |
13,538 | 14,836 | (8.7 | ) | ||||||||
|
Noninterest expense |
||||||||||||
|
Salaries and other personnel |
18,750 | 20,107 | (6.7 | ) | ||||||||
|
Occupancy and equipment |
8,290 | 7,973 | 4.0 | |||||||||
|
Professional services |
2,883 | 2,083 | 38.4 | |||||||||
|
FDIC deposit insurance assessment |
1,142 | 1,439 | (20.6 | ) | ||||||||
|
Marketing |
1,058 | 1,051 | 0.7 | |||||||||
|
Foreclosed real estate writedowns and expenses |
1,827 | 3,373 | (45.8 | ) | ||||||||
|
Gain on other loans held for sale |
- | (326 | ) | (100.0 | ) | |||||||
|
Loan workout expenses |
505 | 1,066 | (52.6 | ) | ||||||||
|
Other |
5,686 | 5,567 | 2.1 | |||||||||
|
Total noninterest expense |
40,141 | 42,333 | (5.2 | ) | ||||||||
|
Income before provision (benefit) for income taxes |
14,824 | 9,316 | 59.1 | |||||||||
|
Provision (benefit) for income taxes |
5,469 | (18,415 | ) | (129.7 | ) | |||||||
|
Net income |
$ | 9,355 | $ | 27,731 | (66.3 |
)% | ||||||
|
Earnings per Share and Results of Operations |
||||||||||||
|
Basic net income per common share |
$ | 0.73 | $ | 2.17 | (66.3 |
)% | ||||||
|
Diluted net income per common share |
0.73 | 2.17 | (66.5 | ) | ||||||||
|
Weighted average common shares, diluted |
12,761,885 | 12,658,752 | 0.8 | |||||||||
|
Efficiency ratio |
76.2 |
% |
76.8 |
% |
(0.8 | ) | ||||||
|
Return on average assets |
0.85 | 2.53 | (66.3 | ) | ||||||||
|
Return on average equity |
7.22 | 26.06 | (72.3 | ) | ||||||||
|
Yields and Rates |
||||||||||||
|
Loans (1) |
4.66 |
% |
5.12 |
% |
(9.0 |
)% | ||||||
|
Investment securities available for sale |
1.81 | 1.62 | 11.7 | |||||||||
|
Trading account assets |
3.37 | 2.64 | 27.7 | |||||||||
|
Transaction deposits |
0.01 | 0.01 | - | |||||||||
|
Money market deposits |
0.03 | 0.02 | 50.0 | |||||||||
|
Savings deposits |
0.01 | 0.01 | - | |||||||||
|
Time deposits |
0.22 | 0.85 | (74.1 | ) | ||||||||
|
Retail repurchase agreements |
0.01 | 0.01 | - | |||||||||
|
FHLB advances and other borrowings |
0.22 | 0.17 | 29.4 | |||||||||
|
Net interest margin |
3.80 | 3.85 | (1.3 | ) | ||||||||
(1) Includes Mortgage and Other loans held for sale.